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SYDNEY, Feb 24 AAP

February 24 2013, 10:43AM

Outgoing BHP Billiton chief Marius Kloppers says demand for minerals will slow in the next five years and companies will have to reduce costs.

The world's biggest miner announced on Wednesday that Mr Kloppers will retire as chief executive in May and will be replaced by 56-year-old Scotsman Andrew Mackenzie.

Mr Kloppers insisted on Sunday that he was not forced to resign and that a succession plan had been in place since his appointment six years ago.

He predicted that demand for minerals from China would continue to be strong but growth would slow.

"I think over the next five years, we as Australians and at BHP Billiton are going to see very strong demand from China but we are going to go from growth rate in minerals demand of 15 to 20 per cent a year to two to four per cent a year," he told ABC's Inside Business.

"That means the suppliers will be able to respond and meet demand and therefore you have to be low cost and you have to take into account that price is not going to help you here."

Mr Mackenzie agreed it was important to keep costs low and to meet demand in a sustainable way.

"I want to continue Marius's success and where we apply the most modern management techniques and technology to ensure we develop them sustainably, safely and in a way the world gets the supply it wants," he told the ABC.